Professional Documents
Culture Documents
Polaris Investor Presentation June06F
Polaris Investor Presentation June06F
1999
Listed on major stock exchanges
2002
Orbitech Merger
2006
CAGR of over 22.3% for the last 6 years
Major transformation
1999 Key statistics Revenues $14mn Headcount 885 2006 Key statistics Revenues $187mn Headcount 6092
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Polaris Today
Business
Global Solutions Specialist with a dedicated focus on the Banking, Financial Services and Insurance vertical 20 years of experience in BFSI Banking, Financial Services & Insurance Over 2,500 projects and 28,000 person years of experience
Global presence
Global Delivery Capabilities(10 development centers) 22 relationship offices across 14 countries 16 Business Solution Centers Focused on Long-Term Customer Relationships(Repeat business of over 86%) 2nd longest single relationship with global customers (20 years)
6000+ associates
Corporate functions
Relationship Banking Center Smart Legacy Modernization Center Insurance Center and Enterprise Innovations Capital Markets Center Corporate Banking Center Technologies for Globally Efficient Enterprises SmartBuild Architecture Group Business Process Outsourcing
Customer Sales
Organization structure
Marketing
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Polaris positioning
Calibrated modernization of existing legacy platforms in a nondisruptive manner by way of deployment of innovative (SmartBuild) solutions that are SOA compliant and backward compatible.
Provider of Smart Legacy Application management services to Modernization maintain, reengineer, aggregate and. services to upgrade portfolios of custom applications the worlds cost-effectively, by leveraging Polaris leading banks continuously replenished warehouse of and financial intellectual institutions property
Proven point solutions leveraging innovative processes and technology that have been delivered cost effectively and provided significant business benefits in terms of risk mitigation, TCO and time to market. Copyright Polaris Software Lab Limited, 2005.
Confidential. Not to be republished without prior consent
5 Values to be delivered to the customer Cost Quality Reliability Flexibility Time to market
Using the 7 Levers 1. 2. 3. 4. 5. 6. 7. Technology Knowledge Domain Knowledge Customer Environment Knowledge Process Methods and Tools Reusable components Energy and Passion of People
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COMPETENCIES RESOURCES
CAPABILITIES
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Change-the-Bank Offerings
Operate-the-Bank Offerings
Horizontal Practices
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Change-the-Bank Offerings
Operate-the-Bank Offerings
Horizontal Practices
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SLM Custodial solutions TechPort Global Liquidity Sweeping & Pooling Dashboards and Corporate Online Analytics Treasury MM/FX Imaging and Workflow Global roll Out with ERP
Operate-the-Bank Offerings
Horizontal Practices
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SLM Custodial solutions Liquidity Sweeping & Pooling Corporate Online Treasury MM/FX Global roll Out
Hosted Services
Transaction Processing
Horizontal Practices
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SLM Custodial solutions Liquidity Sweeping & Pooling Corporate Online Treasury MM/FX Global roll Out
Hosted Services
Transaction Processing
Siebel, BI/DW, Linux, Rational, PACE, Portals, dotNET, Imaging & Workflow, Infrastructural Management, Professional Services
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Citigroup accumulated relationship of solutions worth over USD 1 Billion over the last decade Citigroup relationship stands at USD 105MM for FY05(single largest offshore solutions partner) Started as supplier to Citibank India retail business and today support solutions and services in more than 70 countries, 120 locations across all lines of business in the Citigroup world.
Single Customer 1 Turnaround time & 9 Quality of delivery as 8 4 Key Success Factors (KSF)
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SEI CMMi Level 5 ISO 9001 : 2000 ISO 9001 SEI CMM 2001
&
Level 3
TQM
1999
Practice
1991
1995
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Service offerings
Horizontals
Application Development Application Development Re-engineering Re-engineering Maintenance Maintenance Solution Integration Solution Integration Global Deployment Global Deployment Application Certification Application Certification Business Consulting Business Consulting Front end Technology Front end Technology Internet Technology Internet Technology Customer Relationship Management Customer Relationship Management Enterprise Knowledge Management Enterprise Knowledge Management Network Management Network Management Mainframe Mainframe Middleware Technology Middleware Technology Mobile Technology Mobile Technology Enterprise Resource Planning Enterprise Resource Planning Enterprise Application Integration Enterprise Application Integration Application Certification Application Certification Data Warehousing Data Warehousing
Verticals
C C oo rr pp oo rr aa tt ee B B aa nn kk ii nn gg W W ee aa ll tt hh M M aa nn aa gg ee m m ee nn tt B B rr oo kk ee rr aa gg ee & & S S ee cc uu rr ii tt ii ee ss
C C oo nn ss uu m m ee rr B B aa nn kk ii nn gg
II nn ss uu rr aa nn cc ee
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Why SOA?
Business agility depends on the free flow of information, services and business processes across the organization. However this flow is stymied by the heterogeneous nature of the typical large enterprise. Multiple platforms (IBM, BEA, Microsoft, SAP, Oracle etc) and technologies (J2EE, .NET, Legacy, etc.) require IT to hard code the point to point connections, hampering the swift flow of information and slowing the delivery of new business services. Service Oriented Architecture (SOA) has emerged as the leading IT strategy for streamlining service delivery. SOA takes the discrete business functions contained in enterprise applications and organizes them into interoperable, standards-based services that can be quickly be combined and reused in composite applications and processes. The desire for Organizations to be service driven is creating a significant pull for IT to adopt SOA.
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SOA wave and Componentisation has been endorsed and adopted by many leading vendors and analysts
SOA wave and componentization has been endorsed and adopted by many leading technology vendors . . . Software Services companies
Yankee survey
IDFC survey
Infoworld survey
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SOA oppurtunity
While most large banks have existing offshore relationships, degree of work offshored varies widely offering Polaris window of opportunity 20
Per cent of total workforce relocated
Customers are open to giving vendor like Polaris a chance
10
5 4 3 2 1 0 0 1,000
Market shapers
A new vendor like Polaris can enter our banks, if it has some specific business expertise, in new and growing areas such as derivatives
VP, IT, Top tier, Wholesale bank
The biggest proof point for us is internal. If you have delivered something well then there is no reason why you cant get more business
VP, Vendor Management, Investment Bank
2,000
4,000
10,000
* Includes some BPO revenue in cases where it is not separately broken out Source: Press releases; company websites
12,000
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Product offering
Integrated Multichannel Core Banking
Portfolio Mgt Cash Mgmt
Intellect SuiteTM is an enterprise platform that meets the needs of retail, private and corporate bankingDesigned using J2EE technology Over 56 modular components or GeneS for 10 banking business lines Supports over 10 million customers Developed on contemporary technology (Open API standards) enabling easy integration with legacy systems Web-enabled, multi-currency and multi-lingual
Loans Cards
Trade Treasury
What are GeneS? Intellect Suite is designed and built with re-usable components called GeneS (Generalised Services). Several GeneS come together to form a product. Intellect Suite has over 56 GeneS in different combinations to develop a variety of banking solutions. Being functional-centric components, many GeneS are common across solutions.
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Products
GeneS (Generalised Services) APIs (Application Programming Interfaces) RUSAs (Reusable Software Assets)
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GL
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a
Customer Fee Web services Collateral GeneS
Accelerated Build
Source Code
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Competitive advantage
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PACE Services
End to end testing
Product testing Project testing
Independent Testing and Certification Unit Vast experience in testing mission critical applications 20% of the testing team are domain experts Tested and certified over 300 releases with many zero defect deliveries 1500+ person years of testing experience Expertise in Project and Product testing Continuous process improvement through Quantitative Project Management (QPM) Expertise in Test Automation tools WinRunner, Test Director, Quick Test Professional (QTP), SilkTest, LoadRunner, OptimizeIT, Purify, Jverify Performance Metrics Defect unearthing efficiency of 95%
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Test automation
Tools Selection Tools Scripting Performance Analysis
Major
Smart-Build, SLM for Tier 1 Banks of Europe, NA Selected products for Tier 2 Banks of ME, Latam, ASPAC Cards Liquidity Collect Origination Lending
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Strategy Implementation
Q3-Q4 FY06 Timing Penetrate top accounts with IP led positioning Key corporate theme Stabilize and focus
Ensure current growth trajectory in IT services business Focus on IP led solutions, leverage SOA in the marketing message and get internal orgn alignment Realign organizational structure and key processes to create
Customer-back design End to end responsibility Efficient operational platform
FY07
Critical initiatives
Accelerate growth by firmly establishing IP driven off shoring approach Transform large accounts into AAA relationships Ramp up to 10-15 of top 100 Deliver enhanced banks and deliver distinctive IPprofitability on account of client diversity, sharper led solutions to establish a platform for growth within these expertise positioning and better operating platform accounts Build partnerships with key players to leverage current componentization/SOA wave and gain market credibility Enhance front end capabilities and key account management function Induct IP driven approach in delivery of conventional service lines Enhance full service offerings with new service lines such as Linux migrations and niche package implementation
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Optimus-BPO offering
Aims to fulfill emerging customer requirements for an integrated technology and operations offering using its expertise in the banking and financial services domain
DESIGN
DELIVER
Application,Develo pment,Managemen t & Support
OPERATE
Business Processing
Consulting
Feature customization/desi gn
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A holistic offering
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Po la
ris
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OPTIMUS Advantage
Li n
ea g
Decreased time to market Optimus Integrated Outsourcing seeks to deliver much more than just cost savings
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Polaris Advantage
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Associate Statistics
Education Profile
Others 9% Doctorates 1% M asters/ P ost Graduates 31%
20-25 23%
25-30 40%
Flat Hierarchy 6 levels to CEO 6000 + Associates 25% Female Associates: diversity critical 20% onsite employees- US, UK, Singapore 90% Qualified Professionals (Engineers, MBAs, MS etc)
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Attrition Statistics
A ttritio A a s (G era n n ly is en l)
M re th n 6 o a yrs 4 % 4 to 6 yrs 12 % 2 to 4 yrs 19 % 1 to 2 yrs 3 8%
0 to 1 yrs 2% 7
Voluntary Attrition %age of 16%-17% for FY 05-06 Attrition at middle management level is much lower
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Career Development
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FINANCIALS
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Through:-Investments in IPs
Total Costs incurred for developing the products $ 36.90 Mn (3.5 years) Part of the Product development costs were capitalized till Dec 04 $ 11.48 Mn Total Costs charged to P&L till Dec 05 is $ 25.41 Mn Had the accounting treatment not changed, the EBITDA would have been higher by $ 1.2 Mn per quarter 2% increase in EBITDA margins.
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Revenue profile
Revenue for FY06 was Rs 825 crore
Rs in Crores 900 800 700 600 500 400 300 200 100 FY 2 0 0 1 FY 2 0 0 2 FY 2 0 0 3 FY 2 0 0 4 FY 2 0 0 5 FY 2 0 0 6 Fina nc ia l Ye a r
CAGR : 19.5%
USA 39.73%
A SPA C 21.32%
Re v e nue Split
80.0% 60.0% Citi Non Citi
Eu r o p e 27.89% In d ia 11.06%
40.0% 20.0% 0.0% Citi Non Citi 2005-06 58.2% 41.8% Financial Year 2004-05 60.1% 39.9%
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Ge o g r a p h y
U S/ N o r t h A m e r ic a Eur ope I n d ia A s ia P a c ific & J a p a n
Q1 06
4 2 .9 0 % 2 7 .6 0 % 1 0 .5 0 % 1 9 .0 0 %
Q2 06
4 0 .7 0 % 2 8 .4 5 % 1 0 .1 0 % 2 0 .7 5 %
Q3 06
3 7 .5 4 % 2 9 .7 2 % 1 1 .8 0 % 2 0 .9 4 %
Q4 06
3 8 .4 2 % 2 8 .5 3 % 1 1 .2 9 % 2 1 .7 6 %
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% of revenue
Q1 06
C itib a n k N o n C iti B a n k 5 9 .6 3 % 4 0 .3 7 %
Q2 06
5 7 .7 0 % 4 2 .3 0 %
Q3 06
5 7 .2 4 % 4 2 .7 6 %
Q4 06
5 8 .2 1 % 4 1 .7 9 %
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EBITDA
EBITDA for FY06 was Rs.77.07 cr
140 120 100 80 60 40 20 FY2002 FY2003 FY2004 FY2005 FY2006 FY2001 25 % 20 % 15 % 10 % 5% 0%
Product Investments Change in accounting treatment Salary Increases Investments in Sales Infrastructure Muted Revenue Growth
EB ITDA
EBITDA as % of Rev
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PAT
in Rs. cr
40.00 30.00 20.00 10.00 0.00 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006
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Expenditure Analysis
In Rs.cr
Rs in Crores
Expenditure has been under control over the last 4 quarters Increase mainly due to salary hikes in Q2 Further optimization underway
250 200 150 100 50 SG&A S DE Q1 44 139 Q2 45 141 Q3 49 142 Q4 47 140 SG&A S DE
Q u a r t e r - FY 2 0 0 5 - 0 6
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Balance Sheet
In Rs Crores 31-Mar-06 Sources of Funds Shareholders Capital Secured Loans Total Application of Funds Net Book Value Cash & Bank balances Working Capital Investments Miscellaneous Expenditure Total 31-Mar-05
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Cash Flows
Fy 05-06 Op e n in g Balan ce Cas h f low f rom Operating A c tiv ities Cas h f low f rom Inv es tement A c tiv ities Cas h f low f rom Financ ing A c tiv ities C lo s in g Balan ce 137 72 (72) (16) 122 In C r Fy 04-05 80 121 (49) (15) 137
Company has been consistent in generating cash from operational activities There are no debts in the company Cash & Cash balances of Rs.122 crores as of 31 Mar 06
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Utilization
78.0% 76.0% Utilisation % 74.0% 72.0% 70.0% 68.0% 66.0% Utilis ation % Q1 76.0% Q2 77.1% Q3 72.8% Q4 70.0% 72.8% 70.0%
76.0%
77.1%
2005-06 - Q1 to Q4
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Associate Strength
To ta l As s o cia te s tre n g th 5 ,8 5 0
2 0 0 5 -0 6 - Q1 to Q4
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Realization 2005-06
8 0 .0 0 6 0 .0 0 USD per hour 4 0 .0 0 2 0 .0 0 O n s ite Of f s hore
Q1 5 7 .2 5 1 9 .6 5
Q2 5 7 .4 0 1 9 .7 0 2005-06
Q3 5 7 .6 0 1 9 .0 0
Q4 5 7 .5 0 1 9 .0 0
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Conclusions
Healthy Balance sheet, No Debt Strong Cash Flows Significant investments in Products to differentiate Polaris Software Lab from other vanilla outsourcing service providers All product and other investments through internal accruals Cost Structure stable over the last 5 quarters Revenue uptake will drive significant increase in profitability
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THANK YOU
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